Cost Control: It Pays to Audit Phone Bills

If you're interested in cutting your telecommunications costs, you've got to pay attention to your monthly bill. According to Tel-Adjust, a phone-bill-auditing service based in Bloomfield Hills, Mich., as many as 80% of phone bills contain errors. "Billing inaccuracies can add up to tens or even hundreds of thousands of dollars," says Cynthia Fitzgerald, one of Tel-Adjust's partners.

Corporate phone bills can include two kinds of errors: usage and monthly-flat-fee inaccuracies. "By more carefully monitoring who is calling what long-distance numbers and why, companies can themselves detect usage errors," says Fitzgerald. But because billing structures are so highly technical, companies need help to detect flat-fee errors.

As a matter of fact, the confusing nature of those fee configurations contributes to the likelihood of faulty billing -- especially in a fast-growing company that keeps adding phone lines and new telecommunications services. "Firms like ours obtain the phone company's technical documentation that describes exactly what your monthly rate is based on. Then we double-check that all those phone lines and data circuits actually exist, and we make sure that the tariffs you're being charged are the appropriate ones," explains Fitzgerald.

Is there a reason you couldn't do the same in-house? Tariff regulations are particularly complicated, and they are subject to frequent changes. Most corporate telecommunications staffers cannot stay on top of those changing rates.

Most companies, Fitzgerald says, will do fine with an outside audit every three years. Annual checkups might make more sense if you've been expanding rapidly or moving. Look for an auditor whose contingency fee is pegged to the refund you receive rather than to an assessment of future savings.